Sino-Forest Says Report Refutes Allegations That Burned Paulson

Nov 15 2011 | 11:04am ET

Sino-Forest Corp., the Chinese timber company that ranks among Paulson & Co's most disastrous investments in a disastrous year, said today that the fuss was much ado about nothing.

The Toronto-listed company said today that an independent investigation had refuted a June 1 report from short-seller Muddy Waters that sent its share price into a tailspin. Muddy Waters accused Sino-Forest of overstating its timber holdings in China.

While the committee was unable to verify Sino-Forest's valuation of its forestry holdings, it did confirm its timber assets and titles, Sino-Forest said, rejecting the "substance" of Muddy Waters' allegations.

"This report proves that Sino-Forest is a real company with real assets, real revenue and in huge stark contrast to Muddy Waters' allegations," CEO Judson Martin said. Martin blasted Muddy Waters for a "basic lack of knowledge of how forestry rights work in China."

Muddy Waters' Carson Block rejected the report, noting that its timing "makes clear that the directors and officers are responding to the criminal investigation announced last week by the integrated market enforcement team of the Royal Canadian Mounted Police."

Paulson sold its entire 12.5% stake in Sino-Forest in the weeks following the allegation. The hedge fund said it lost C$562 million on the investment.


In Depth

Q&A: Quad Advisors’ Borish Is Looking For Real Traders, Not Index Huggers

Aug 20 2014 | 1:43pm ET

Peter Borish, who served as founding partner and director of research at Tudor Investment...

Lifestyle

Nicky Hilton To Wed James Rothschild

Aug 20 2014 | 5:23am ET

When it comes to husband-material, socialite Nicky Hilton is sticking with finance...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

 

Futures Magazine

PREVIEW July/August 2014 Cover

Inside Futures' 500th Issue

The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.

The Alpha Pages

TAP July/August 2014 Cover

Real talk on alternative investments, business & finance

The Alpha Pages Editor's Note